GPMT is a REIT that focuses primarily on directly originating, investing in and managing senior floating-rate commercial mortgage loans and other debt and debt-like commercial real estate investments. It was formed to continue and expand the commercial real estate lending business established by Two Harbors Investment Corp (TWO), a publicly traded hybrid mortgage real estate investment trust. In 1Q15, Two Harbors established its commercial real estate lending business, which it conducts through TH Commercial Holdings and its subsidiaries, which, collectively, is GPMT's predecessor.
GPMT will be externally managed by Pine River Capital Management, or PRCM, by the team that currently manages the commercial real estate lending business for Two Harbors. PRCM is an asset management firm and SEC registered investment adviser with approximately $9 billion of assets under management as of June 1, 2017.
Its initial portfolio consists of its Predecessor's portfolio, that as of March 31, 2017 consisted of 41 commercial real estate debt investments with a principal balance of $1.6 billion, with an additional $181.9 million of potential future funding obligations. Also, its initial portfolio consists of five additional floating-rate senior commercial mortgage loans with a principal balance of approximately $177 million, with an additional $50 million of potential future funding obligations that it has closed since March 31, 2017.
Its primary target investments are directly originated floating-rate performing senior commercial real estate loans, typically with terms of three to five years, usually ranging in size from $25-$150 million. GPMT typically provides intermediate-term bridge or transitional financing for a variety of purposes, including acquisitions, recapitalizations, refinancings and a range of business plans, including lease-up, renovation, repositioning and repurposing of the property. Also, it generally targets the top 25, and up to the top 50, metropolitan statistical areas in the United States.
For the three months ended March 31, 2017, GPMT generated $17.7 million in net interest income, up about 78% year/year. This was largely driven by interest income generated from commercial real estate assets, which more than doubled to $23.6 million. Net income surged by 128% year/year to $13.5 million. Looking at the balance sheet, GPMT held $1.55 billion in commercial real estate assets as of March 31, 2017. It carries long term notes payable of $609.7 million.
As a REIT, GPMT is required to distribute at least 90% of its taxable income each year. The company states in its prospectus that it generally intends to pay quarterly distributions in an amount equal to its taxable income.